The present description relates generally to the field of methods of and systems for processing purchase orders, and more specifically to methods of and systems for applying rules to accept or reject the purchase orders.
Purchasing products and services from a supplier or provider typically involves sending a purchase order to the supplier requesting a specific number of items for a specific price. The number of items multiplied by the price of the items provides a total cost associated with the purchase order. Prior to sending the purchase order, the purchase order may need to be approved by an entity, such as a budgeting department. The entity may apply one or more rules to the purchase order in determining whether to approve the purchase order. For example, a rule may dictate that the approval is granted or denied based on whether incurring the total cost of the purchase order is acceptable in view of budget constraints. Accordingly, the purchase order is approved or rejected based on budget constraints prior to being sent to the supplier.
The rules that are applied to the electronic purchase order may be any of a plurality of types of rules. For example, the rule may be a budgeting rule. Budget rules describe the amount of money available to purchase merchandise for a given time period. During a pre-season planning and buying phase, the budget rules may be used by planners and buyers to control their purchasing budget. During a seasonal phase, the budget rules may be utilized in calculating performance as the budget rules are updated based on sales activity. For example, planners and buyers may monitor the updated budget rules to determine if each category's performance is proceeding according to plan or if corrective steps, such as price reductions or stopped orders, need to be taken to manage inventory.
The retail business can require that certain purchase orders be processed in a very short amount of time, while other purchase orders must be placed in advance of the desired delivery. For example, changes in current trends in the fashion industry may require that inventory be increased on short notice. Additionally, fashion articles may require ordering well in advance of delivery, in some cases six months or more in advance. For certain aspects of the fashion industry, items may be required to be ordered one or more seasons in advance. Further, tracking inventory and budgets for seasonal items can be important to the profitability of a business. For example, identifying a particularly fast selling item and ordering additional quantities of the fast selling item within a prescribed budget may increase the profitability of a retail location.
Moreover, increasing inventories on short notice during, for example, a seasonal phase, in order to accommodate increased demand due to a change in trends or a fast selling item will have an impact on the budgets planned for these items during a pre-season planning phase. For example, purchase orders generated for additional quantities of an item to meet an increased demand for the item may exceed the amount of funding budgeted for the item during the pre-season planning phase.
Thus, there is need for a method of and system for processing purchase orders that is configured to automatically approve or reject purchase orders based on the application of a rule. There is further need for such a system and method configured to provide a user with remedial options for purchase orders that have been rejected based on the application of the rule.